Supplemental Problem 4-6 Completing a Worksheet Excalibur Co of December 31 appe

Question

Supplemental Problem 4-6 Completing a Worksheet Excalibur Co of December 31 appears on the following page. Information necessary to prepare the year-end adjusting entries appear below: poration sells video games for personal computers. The unadjusted trial balance as I. The office equipment was purchased two years ago and is being depreciated straight line over eight years with no salvage value. 2. Accrued salaries and wages at year end should be $4,500. The company borrowed $30,000 on September 1. The principal is due to be repaid in 10 years. Interest on the note is payable twice a year: On August 31 and February 28 at arn annual rate of 10% (or 5% every six months). 3. The company charges the Supplies (asset) account when supplies are purchased. J. Prepaid rent at year end should be $1,000. Supplies on hand at year end cost $500. Required: Complete the worksheet on the following page.

Explanation / Answer

Unadjusted trial balance Adjusting entries Adjusted trial balance Income statement Balance sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 23300 23300 23300 Accounts receivable 32500 32500 32500 supplies 0 500 500 500 prepaid rent 0 1000 1000 1000 inventory 65000 65000 65000 Equipment 75000 75000 75000 Accumlated depreciation 10000 9375 19375 19375 Accounts payable 26100 26100 26100 Wages payable 3000 1500 4500 4500 Notes payable 30000 30000 30000 Interest payable 0 1000 1000 1000 Common stock 80000 80000 80000 Retained earnings 16050 16050 16050 Sales revenue 180000 180000 180000 Cost of goods sold 95000 95000 95000 interest expense 0 1000 1000 1000 Wages expense 32350 1500 33850 33850 Rent expense 14000 1000 13000 13000 supplies expense 2000 500 1500 1500 Utility expense 6000 6000 6000 Depreciation expense 0 9375 9375 9375 Totals 345150 345150 13375 13375 357025 357025 159725 180000 197300 177025 Net income 20275 20275 Totals 180000 180000 197300 197300

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